PROBLEM 1

STATEMENT OF CASH FLOWS

SPRING COMPANY
FOR THE YEAR ENDED DECEMBER 31, 2012

Net Cash Flow from Operating Activities

Net income P 118,400
Add: Increase in deferred tax payable 10,000
Increase in Accounts Payable 9,000
Decrease in inventory 7,400
Depreciation expense 25,200
Amortization of discount on bonds payable 3,800
Less: Increase in Accounts Receivable (14,800)
Decrease in salaries payable (4,600)
Gain on sale of land (10,600)
Net cash provided by operations 143,800

Cash Flow from Investing Activities

Payment for purchase of building P (196,000)
Payment for purchase of long-term investments (19,200)
Proceeds from sale of land 14,000
Net cash used for investing activities (201,200)

Cash Flows from Financing Activities

Proceeds from issuance of note P 36,000
Proceeds from issuance of ordinary shares 74,200
Payment of dividends (72,000)
Net cash provided by financing activities 38,200

Net Decrease in Cash P (19,200)

Cash balance, beginning 40,600
Cash balance, December 31, 2012 P 21,400

Notes to financial statements: Investing and Financing Activities Not Affecting Cash
Issuance of finance lease for equipment P 4,000
Acquired equipment by issuance of finance lease (4,000)